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BBVA
Latin America Conference
May 2019
GENERAL INFORMATION
The following material is submitted by way of general information regarding Controladora Mabe, S.A. de C.V., “Mabe”, as it stands to date. Said information is presented in a summarized fashion and is not intended to be comprehensive. Nor does it constitute arecommendation for potential investors. This presentation is strictly confidential and shall not be divulged to any other person.
No representation or guarantee, either expressed or implied, is intentional, and its exactness, precision or comprehensive information herein presented shall not be emphasized. This presentation may contain declarations that express the expectations of managementregarding future events or results in lieu of historic events. These forward-looking declarations imply risk and uncertainty that may cause the real results to differ materially from those forecast, and Mabe cannot ensure that said declarations will prove to be correct. These risks and uncertainties include factors related to all the economies where we operate, which in turn may show volatility and may be adversely affected by factors pertaining to other countries, related to the business of retail sales, that by its very nature is cyclical and linked to the highly competitive industry of which Mabe is a part and in which it operates.
COMMENTS ON FINANCIAL INFORMATION:
This presentation contains our unaudited financial information. EBITDA is not a measure of financial performance under IFRS and should not be considered as an alternative to net income or operating income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.
INDUSTRY & MARKET DATA:
Certain data is based on our estimates, which are derived from our review of internal surveys, as well as independent sources.
TERMS AND CONDITIONS OF USE:
Viewers or recipients of the information herein that do not agree with the term and conditions of use, should not utilize any information contained herein. Decisions based on information contained herein are the sole responsibility of the person viewing it. In exchange for utilizing the information you agree to indemnify and hold Mabe, its officers, directors, employees, affiliates, agents, licensors and suppliers harmless against any and all claims, losses, liability, costs and expenses (including but not limited to attorneys' fees) arising from the use of the above mentioned information or from any decisions that the viewer makes based on such information.
These terms and conditions and this Site are governed by the federal laws of Mexico applicable therein, excluding any conflict of laws which would lead to the application of any other laws. You hereby irrevocably submitted to the federal courts located in Mexico City for any disputes or matters arising from, connected with, or relating to this information or any related matters.
DISCLAIMER
____________________(1) South America includes: Argentina, Colombia, Peru, Chile, and Ecuador(2) Central America includes: Guatemala, Honduras, Nicaragua, Costa Rica, Panama, Dominican Republic and El Salvador(3) Weighted average market share of units sold in all countries in which Mabe has a presence as of 2017
Well DiversifiedRevenue Profile
+2.4 mm Units Sold in 1Q19
1Q19 LTM
US$3.1Bn Revenues
US$280MM EBITDAR
8.9% EBITDAR Margin
Home Appliances Leader [3]
+18,000 EmployeesJoint Venture
26%
16%
10% 9%
8%
32%
(21%) (38%) (31%) (10%)
Mexico (23%)US Exports (48%)
South America (11%) [1]
Revenue Breakdown
Central America (6%) [2]
Other Exports (3%)
Refrigerators
Ranges
Laundry Others
Since 1987
Others
Competitor 1
Competitor 2
Competitor 3
Competitor 4
Canada (10%)
LEADING PLAYER IN THE HOME APPLIANCES INDUSTRY IN THE AMERICAS WITH A STRATEGIC PARTNER
General Terms
Export Agreements
SynergisticRelationship
Pursuant to the JV agreement, GE Appliances, a Haier company (48% Mabe ownership), is Mabe’s largest customer and sole distributor of products in the US
Mabe is the exclusive distributor of GE Appliances and Haier brands in Canada, Mexico, and the rest of Latin America
GE Appliances, Haier, and Mabe have a strong interaction among their R&D centers
Mabe is the largest product supplier for GE Appliances in the US market
Long term manufacturing contracts with fixed margins (cost-plus)
Mabe designs and develops many GE Appliances products sold in the US
Haier licenses GE Appliances trademarks & patents to Mabe and provides access to relevant manufacturing technology
Mabe has a preferred raw material sourcing arrangement with Haier’s suppliers Integrated decision-making process that operates in synchrony between Mabe
and GE Appliances, a Haier company Additionally, Mabe’s leading R&D facilities operate in conjunction with Haiers’ in
the U.S., Germany, China, South Korea, Japan, and New Zealand
LEVERAGING OUR JV WITH GE APPLIANCES & HAIER FOR 30+ YEARS
Strong product portfolio in all core product categories Differentiated brands for different customer segments Constant segment strategy optimization to better serve customers
Central America1
Andean Region2
#3 #3
____________________(1) Central America includes: Guatemala, Honduras, Nicaragua, Costa Rica, Panama, Dominican Republic and El Salvador(2) Andean includes: Colombia, Peru, Chile, and Ecuador
BrandSegmentation
Ultra Premium
Premium
MassMarket
Local
#1
Market Share#1 #1
MARKET LEADERSHIP ACROSS THE AMERICAS WITH STRONG BRAND RECOGNITION
15.4%
76.9%
6.4%
1.3%
41%
20%
39%
(1) Mexico only.
Well-Balanced Customer Base
+1,200Clients
Top 20(Mexico)
Joint Venture Fixed Margin Long-Term
Contracts
(% of 2018 Revenues)
Targets End-Consumers Through Multiple Channels(1)
National Chains: 66%
Regional Chains: 26%
High End: 4%Other Channels: 4%
Retail Outlets Segmentation (% of Revenues)
2016 2017 2018
PRODUCT OFFERING AND CUSTOMER BASE
Key Products
Refrigerators Ranges Laundry OthersFree Standing
HP(2)
Built-In
Top / Bottom Mount
Side by Side
Bottom Freezer
Top Load Washer & Dryer
Laundry Center Dishwasher
A/C
Range Hoods
Ap
r
Aug Dec Ap
r
Aug Dec Ap
r
Aug Dec
Over 4,000 customers, between large retailers and mom-and-pop stores Strong relationship with leading distributors throughout the region support Mabe’s position as the
market leader Mabe’s products are sold through a diversified base of retail channels to reach all customer
segments We also sell in: Egypt, The Philippines, Saudi Arabia, United Arab Emirates and across the
Caribbean
Canada
Mexico
South America
CentralAmerica
Strategic Partnerships
EXTENSIVE DISTRIBUTION NETWORK BASED ON KEY PARTNERSHIPS
44 39 48
8 8
60100
58
24 21
104
139
106
32 29
2016 2017 2018 1Q18 1Q19
Capital Expenditures (US$MM) Outstanding Characteristics
Hard-to-replicate manufacturing footprint provides efficiencies of scale and acts as a barrier to entry in key markets
CapEx for automation is being invested on a yearly basis
Our most relevant supplier represents no more than 8% of our raw material purchases
Facilities operate under a “Lean Enterprise Principle” of continuous improvement and incorporation of new market trends & technologies
Manufacturing Plants
Capacity: 2MM Utilization: 86% Key Products:
Refrigerators
Celaya (2000)
Capacity: 60,100 Utilization: 85% Key Products:
Components and parts
Querétaro (1982)
Capacity: 2.8MM Utilization:
74% / 94% / 94% / 95%
Saltillo (1996) San Luis Potosí (1989/1994)
Guayaquil (1995) Manizales (1996)
Capacity: 330K
Utilization: 38%
Key Products:Refrigerators
San Luis (2007)
Key Products: Washers / Dryers /Laundry Centers /Components
Capacity: 400K Utilization: 40% Key Products:
Gas and Electric Ranges
Capacity: 1MM
Utilization: 60%
Key Products:Refrigerators
Capacity: 3.7MM
Utilization: 98%
Key Products:Gas / Electric Ranges / Ovens
Capacity: 3.2MM
Utilization: 88%
Key Products:Compressors
STATE OF THE ART MANUFACTURING FACILITIES
44 39 48
8 8
60100
58
24 21
104
139
106
32 29
2016 2017 2018 1Q18 1Q19
Expansion
Maintenance
T O TA L S A L E S 1 Q 1 9 B Y R E G I O N
58%22%
17%
3%
North America MexicoLatin America International
34%
31%
28%
7%
Cooking RefrigerationLaundry Others
T O TA L S A L E S 1 Q 1 9 B Y S E G M E N T
T O T A L S A L E S 1 Q 1 9 B Y
R E G I O N & S E G M E N T
12%
% Δ in USD
SEGMENT NORTH AMERICA MEXICO LATIN
AMERICA INTERNATIONAL
C o o k i n g 37% 31% 26% 38%R e f r i g e r a t i o n 28% 26% 47% 31%L a u n d r y 32% 28% 16% 17%O t h e r s 3% 15% 11% 14%
Total Sales Change vs 1Q18 29% (2%) (13%) 9%
Figures in US$MM, unless otherwise noted
TOTAL SALES 1Q19
RESULTS OVERVIEW
C O N C E P T 1 Q 1 9 1 Q 1 8 D V S 2 0 1 8
S a l e s 701 627 12%
E B I T D A 53 32 66%
E B I T D A M a r g i n 7.6% 5.1% 251 bp
E B I T D A R 54 37 47%
E B I T D A R M a r g i n 7.7% 5.9% 186 bp
C a p E x 29 32 (8%)
N e t D e b t 712 858 (17%)
N e t L e v e r a g e 2.74x 3.86x (1.12x)
N e t I n t e r e s t C o v e r a g e 4.39x 2.85x 1.54x
Figures in US$MM, unless otherwise noted
DEBT PROFILE
370
131 175
18 18 18
68
6
8 8 8 8 2
2019 2020 2021 2022 2023 2024 2026 2028
M AT U R I T I E S
Notes 2028 Notes 2019
During March we successfullyrefinanced our CAD-denominatedloan. We lowered the interest rateto a fixed 4.17%.
Average life of debt: 6.7 years
712
858
120
45
1Q19
1Q18
D E B T
Net Debt
Gross Debt: 903
Gross Debt: 832
Figures in US$MM, unless otherwise noted
F INAL REMARKS
Strong US demand for GE Appliances products.
During 2Q19 we will be launching the GE Café brand in Canada.
We expect South America to deliver mixed results; Mexico will start to pick up by 2Q19.
We are analyzing alternatives to refinance the US$131MM that will mature by the end of the year.